TNAG-0672-FCO40-821-Legislation-for-Crown-lands-in-Hong-Kong-1977 — Page 200

C.S. 84

XCR(75)156

RESTRICTED

(h) Premium

(i) Building covenant

:

4

(ii)

(iii)

the grantee will be res- ponsible for the maintenance only of the areas coloured yellow on the plan annexed comprising two nullahs provision of 50 car-parking spaces within the lot for uses connected with the Amuse-

ment Park only

$7,200,000 (see paragraph 10 below)

the existing buildings on the site constitute a reasonable amount of development and only a maintenance clause will be included.

10

It is not possible to arrive at a value by comparative means and the premium has been based on the net profits over the last three years and deducting the value of land surrendered in exchange. The valuation of the land before deduction of the value of surrendered land would allow for a return of about 17% on total average net fixed assets. This is considered appropriate for this type of business, which has wide fluctuations in profitability. The Secretary for the New Terri- tories has also recommended that because of the nature of the business, the premium should be payable by a 10% down-payment and the balance by an annual rental payable throughout the lease term calculated at 10% interest. The annual rental would be $738, 753 payable in advance. Although this is not a standard formula, it will provide a reasonable return to the Government.

11

Since the area to be granted will exceed the area surrendered, the grantee will be required to surrender in addition an amount of land equivalent to the Crown land in exchange on a foot-for-foot basis with a premium payable for modification which is included in the figure of $7.2 million above.

12

This case is unusual because of its past history, and because of the unusual nature of the business. The main grounds for the re- commendation are that the Park is being run well, provides entertain- ment for a very large number of people, and would be very hard to establish permanently by other means.

13

Honourable Members will be asked to advise:

RESTRICTED